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Gmg Debacle

In: Business and Management

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GMG to exit wide-body aircraft operation and re-focus on high growth domestic and regional routes using new generation narrow-body aircraft

Dhaka, March 28, 2012:
GMG Airlines is planning to adopt a new business strategy in light of rising fuel prices and changing international competitive environment through a 360 degree restructure of its strategy, organization, fleet and business model. It will redesign its route network to focus on higher yield, higher growth domestic and regional routes using new generation narrow body aircraft.

Mr. Sanjiv Kapoor, CEO, GMG Airlines, shared a new strategy stating that GMG will be focusing on domestic and regional routes, as the rapid rise of Middle-Eastern airlines in recent years with their access to advantaged sources of funding, advantaged location, large scale, and lower cost base (esp. lower fuel costs and taxes) is making many airlines, both in Asia and in the West, review their strategies and focus on routes where the competitive environment is more level. As a result, GMG will refocus more on South, South-East, and Near-East Asia, with a few select narrow-body routes to the Middle-East.

As part of the new strategy, GMG has exited wide body operations, and will be replacing their Boeing 767s with new generation narrow-bodied aircraft with a renewed emphasis on on-time performance, reliability, and customer experience. The existing MD 80 aircraft will be removed from the fleet and for some routine periodic maintenance Dash8 aircraft will also be removed from operation for the time being. Along with the shift from wide body to narrow body operations, the airline is also in advanced stages of new routes analysis, new fleet planning and negotiations with lessors and aircraft manufacturers, as well as of right sizing of its workforce to improve productivity. Mr. Sanjiv Kapoor said, "As we transit to the new strategy, our operations will be temporarily suspended with effect from March 30, as we await the delivery of new generation aircraft, clear legacy issues, execute the rightsizing and organize ourselves better to take up the future challenge".
During this period of suspension, all ticketed passengers will be given a full refund through the airline’s sales offices and employees will be paid compensation benefits in accordance with the labour law. Also, the airline is taking necessary steps to retain all of its AOC, route rights, frequencies and will be in full co-ordination with regulators, stakeholders and valued passengers.
On behalf of the board, Mr. Sanjiv Kapoor thanks everyone for the tremendous support extended to GMG through the years since it started operations as Bangladesh’s one of the first private airline for more than a decade.

Company Information: [pic]

GMG Airlines is a private airline of Bangladesh with its head office in the AAA Tower in Nikunjo-2 Dhaka, Bangladesh. It is Bangladesh's largest and oldest private airline operating domestic, regional, and international services, upholding the image of Bangladesh to the world. Its main bases are Shahjalal International Airport, Dhaka, and Shah Amanat International Airport, Chittagong. On 17 June 2009, Beximco Group bought a stake in GMG Airlines and has injected cash in the airline.

Details of GMG:

Carrier Code Z5 ICAO

GMG Website GMG Airlines

Callsignn GMG

Logo size 209

Founded 1997

Secondary hubs Shah Amanat International Airport

Company slogan First Class All the Way

Parent GMG Group & Beximco

Headquarter Dhaka Bangladesh

Logo GMGLogo2010.jpg

Hub airport Shahjalal International Airport Shah Amanat International Airport

Frequent flyer Golden Deer Club

Key people Salman F. Rahman Shayan F. Rahman Ashish Rai Choudhury Shahab Sattar

Destinations 14

Fleet size 8

Hubs Shahjalal International Airport

Headquarters Dhaka Bangladesh

Airline GMG Airlines

History of GMG Airlines:

GMG Airline was established in 1997 and started domestic operations on 6 April 1998. International services were launched six years later on 8 September 2004, with a service from Chittagong to Kolkata.
GMG began regular flights to Bangkok, Delhi and Kathmandu on 20 October 2006. It started services to Kuala Lumpur on 24 January 2007. The airline started its operation to the Middle East with daily flights to Dubai on 1 February 2008. In July of 2010, GMG initiated flights to Jeddah and Riyadh.
They also served Abu Dhabi and Karachi as well as domestic stations Jessore and Sylhet
[pic]
[pic]
A GMG Airlines Bombardier Dash 8
In February 2008 the airline added a leased Boeing 747-300 to the fleet starting wide body operations, this proved to be a White Elephant in an era which saw Global economic problems and an unprecedented peak in oil prices, thus causing a substantial loss to the carrier, the 747 was eventually phased out after just five months of service.
On 17 June 2009, a local conglomerate Beximco took 50% stake in the airline, rebranding it and raising service standards to a higher level
In January 2012, GMG Airlines grounded their fleet of wide body Boeing 767 aircraft, as they proved too costly for the airline to operate. One of the three aircraft have been returned to the lessor ILFC, and the other two are currently parked in Dhaka pending return to the lessor.
On March 28, 2012, GMG announced they will suspend all operations in preparation for re-fleeting the airline. In expects to resume operations later in 2012
According to CEO Sanjiv Kapoor "[GMG's] operations will be temporarily suspended with effect from Mar 30, as we await the delivery of new-generation aircraft, clear legacy issues, execute the rightsizing and organize ourselves better to take up the future challenges". GMG has stated it is planning to adopt a new business strategy in light of rising fuel prices and changing international competitive environment through a 360 degree restructure of its strategy, organization, fleet and business model. It will redesign its route network to focus on higher yield, higher growth domestic and regional routes using new generation narrow body aircraft.

Rebranding:

On 1 May 2010, GMG Airlines unveiled their new logo and livery via their newly acquired Boeing 767-300ER. The new paint job consists of a white fuselage, accompanied by butterfly wings, flowers and pterals that are featured on the engines and the tail. The GMG logo can be seen at the front of the aircraft, just behind the cockpit. The company's web address can be found at the rear, near the tail.
[pic]

Details About Fleet:

As of March 2012, the fleet consisted of the following aircraft, though only the Dash-8 were said to be operational:
|GMG Fleet[12] |
|Aircraft |In Fleet |Orders |Seats |Notes |
|Bombardier Dash 8 100 |1 |0 |37 | |
|Bombardier Dash 8 300 |1 |0 |50 |In the new livery |
|McDonnell Douglas MD-82 |2 |0 |150 |In the new livery, ex Lion Air |
|McDonnell Douglas MD-83 |1 |0 |153 |In the new livery |
|Total |5 |0 | | |

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